Board diversity: An insight of demographic effects of the Norwegian quota rule

Anne Roe

Student thesis: Master thesis


In the wake of the Norwegian quota law implementation of a minimum fraction of 40% of both genders on corporate boards of directors, an interest naturally arises of how this ground-breaking regulation has turned out to affect the boards. The law fully enacted the 1st of January 2008, and companies not complying faced delisting. More women on boards imply more diverse boards in terms of gender. It also may imply more diverse boards in terms of board member demographics. With the aim of investigating the development of board demographics in relation to the quota law, this thesis has quantified and described board member characteristics on age, citizenship, level- and type of education of boards of directors of 20 Norwegian listed firms over the years 2003, 2005, and 2008. Not surprisingly, the quota rule has implied some effects for the sample‟s board demographics. Corresponding to the expectations, this thesis finds that the number of foreigners on the boards has increased. Contrary to the expectations, the average board member‟s age has kept steady over the observation period. Further, this research finds that in addition to have higher education, the newly added women bring educational knowledge mostly within economics and law to the board, whereas the levels of other, firm specific knowledge decrease. These findings may suggest that the boards are more business orientated post the quota law. The boards‟ business orientation, along with the constant board member average age, might suggest that the boards are not that diverse post the quota rule implementation after all. It could be that the attributes the female directors brought to the boards actually are making the boards more homogenous – quite contrary to the Norwegian government‟s intention. This presumption may support several researchers‟ skepticism towards the quota, especially since it is dubious whether the government actually knew the factual impact of the law pre implementation.

EducationsMSc in Applied Economics and Finance, (Graduate Programme) Final Thesis
Publication date2010
Number of pages83